VA awards $19.4M contract for building renovation, highlighting construction sector activity in New York

Contract Overview

Contract Amount: $19,401,777 ($19.4M)

Contractor: AC JV ONE LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-08-12

End Date: 2025-12-31

Contract Duration: 1,237 days

Daily Burn Rate: $15.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATE BUILDING 13AB

Place of Performance

Location: MONTROSE, WESTCHESTER County, NEW YORK, 10548

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $19.4 million to AC JV ONE LLC for work described as: RENOVATE BUILDING 13AB Key points: 1. Contract value of $19.4M indicates significant investment in facility upgrades. 2. Competition dynamics suggest a healthy market for commercial construction services. 3. Fixed-price contract type aims to control costs and provide budget certainty. 4. Contract duration of over 3 years implies a complex or extensive renovation project. 5. Geographic focus on New York highlights regional infrastructure development. 6. The award to AC JV ONE LLC warrants a review of their past performance and capacity.

Value Assessment

Rating: good

The contract value of $19.4 million for renovating Building 13AB appears reasonable for a project of this scope and duration, especially within the New York metropolitan area. Benchmarking against similar large-scale commercial and institutional building construction contracts awarded by federal agencies would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to establish clear cost expectations upfront, which is a positive indicator for budget management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which suggests that while competition was sought, certain pre-qualification or exclusion criteria were applied. With 5 bidders, the competition level indicates a degree of market interest, but the 'exclusion of sources' aspect warrants further investigation to understand if it limited the pool of potential offerors and potentially impacted price discovery.

Taxpayer Impact: The exclusion of sources, even with multiple bidders, could mean that taxpayers did not benefit from the widest possible competition, potentially leading to a higher price than if all qualified firms could have participated.

Public Impact

Federal employees and potentially veterans will benefit from improved facilities at the Department of Veterans Affairs site. The contract delivers essential building renovation services, enhancing the functionality and safety of government infrastructure. The project's geographic impact is concentrated in New York, supporting local economic activity and employment in the construction sector. Workforce implications include job creation for skilled trades and construction professionals in the New York region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method needs clarification to ensure fair market access.
The specific nature of the renovation and its impact on building operations should be monitored.
Performance of AC JV ONE LLC on this extensive project requires close oversight.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Multiple bidders (5) indicate a competitive environment, despite source exclusions.
The project addresses critical infrastructure needs for the Department of Veterans Affairs.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. Federal spending in this area supports the maintenance and modernization of government facilities. The North American Industry Classification System (NAICS) code 236220 confirms its classification. Comparable spending benchmarks would involve analyzing other large-scale federal building renovation projects across different agencies and regions to assess cost-effectiveness.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside requirement. However, the prime contractor, AC JV ONE LLC, may engage small businesses as subcontractors, which would be a secondary impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver the specified work within the agreed-upon price. Transparency is facilitated through contract databases like FPDS, where award details are published. Inspector General jurisdiction may apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Veterans Affairs Facility Construction
Federal Building Modernization Projects
Commercial Construction Contracts
Infrastructure Renovation

Risk Flags

Potential for cost overruns due to unforeseen site conditions in a multi-year FFP contract.
Need to verify contractor's capacity and past performance for a project of this scale.
Justification for 'exclusion of sources' requires scrutiny to ensure adequate competition.
Potential for schedule delays impacting facility availability or operational continuity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $19.4 million to AC JV ONE LLC. RENOVATE BUILDING 13AB

Who is the contractor on this award?

The obligated recipient is AC JV ONE LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $19.4 million.

What is the period of performance?

Start: 2022-08-12. End: 2025-12-31.

What is the track record of AC JV ONE LLC with federal contracts, particularly for projects of similar size and scope?

A review of AC JV ONE LLC's federal contract history would be necessary to assess their track record. This would involve examining past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract modifications. For a $19.4 million project with a duration of over three years, it is crucial to ensure the contractor has demonstrated experience in managing complex renovations, adhering to schedules, and maintaining quality standards on comparable federal projects. Without specific historical data on AC JV ONE LLC, it's difficult to definitively assess their capability, but the award suggests they met the agency's pre-qualification criteria.

How does the awarded price of $19.4 million compare to market rates for similar building renovations in the New York area?

To benchmark the $19.4 million award, one would compare it against the average cost per square foot or per project for similar commercial and institutional building renovations in the New York metropolitan area. This comparison should account for the specific scope of work (e.g., structural, mechanical, electrical, finishes), the age and condition of the building, and prevailing labor and material costs. Industry cost estimating guides and databases, as well as data from recently completed private sector projects of comparable scale, would be valuable resources. Given the high cost of construction in New York, the price may be within market norms, but a detailed analysis is needed.

What are the specific risks associated with a firm fixed-price contract for a multi-year building renovation?

Firm fixed-price (FFP) contracts are generally preferred for controlling costs, but they carry specific risks for complex, multi-year projects like this renovation. The primary risk is that unforeseen issues arising during construction (e.g., discovery of hazardous materials, unexpected structural problems, significant material price escalations) could lead to cost overruns for the contractor. If the contractor cannot absorb these costs, they might seek change orders, potentially increasing the contract price, or face financial distress, impacting project completion. The government bears the risk of paying a potentially higher price if the contractor's initial estimate was too low or if unforeseen conditions are extensive. Robust contingency planning and clear contract terms regarding unforeseen conditions are critical.

What does the 'Full and Open Competition After Exclusion of Sources' procurement method imply for program effectiveness?

This procurement method suggests that the Department of Veterans Affairs initially intended to compete the contract broadly but then excluded certain potential sources based on specific criteria. This could be due to requirements for specialized expertise, security clearances, or past performance that only a subset of contractors could meet. While it aims to ensure that awardees possess necessary qualifications, it inherently limits the pool of competitors. If the exclusion criteria were overly restrictive or not well-justified, it could inadvertently reduce innovation and potentially lead to a less optimal solution or higher price than if a wider range of firms had competed. The effectiveness hinges on whether the exclusions were necessary and appropriate for achieving the project's goals.

How has the Department of Veterans Affairs historically spent on building renovations in New York?

Analyzing historical spending patterns of the VA on building renovations in New York would provide context for this $19.4 million award. This involves examining previous contract awards for similar projects, their values, durations, and the types of contractors engaged. Understanding trends in VA facility maintenance and upgrade spending within the state can reveal whether this contract represents a typical investment, an increase in activity, or a deviation from past practices. It can also highlight any recurring issues or successes with specific types of renovations or contractors in the region.

What are the potential impacts of this contract on the local New York construction market and workforce?

A contract of this magnitude ($19.4 million) awarded for building renovation in New York is likely to have a positive impact on the local construction market. It will stimulate economic activity by creating demand for materials, equipment, and services from various suppliers. Furthermore, it will generate employment opportunities for a range of skilled tradespeople, project managers, and support staff. The duration of the contract (over three years) suggests sustained economic benefit for the local workforce and businesses involved in the project lifecycle. The specific impact will depend on the extent to which local labor and businesses are utilized by the prime contractor and its subcontractors.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 36C24222B0014

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 837 OAKTON ST STE F UNIT 2, ELK GROVE VILLAGE, IL, 60007

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $19,401,777

Exercised Options: $19,401,777

Current Obligation: $19,401,777

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline